I'm working on extracting the problem into a test level so I can analyze it in a more controlled way. What follows are the issues I plan to investigate, if anyone has already dealt with them then that might save me some time.

When a physics object does enter a block or entity -- it seems to get pushed out at very high speed. By intervening when physics is disabled, the result seems to be that the object behaves much more naturally. This high speed coming out of a block is also a problem if you are using phent_setmaxspeed because the body ends up with zero velocity because it reached the max speed.

The problem seems *much* more apparent when traversing a map entity or model.

I agree that if I can keep the forces and velocity low enough, the problem does not seem happen very much, but in many cases this creates a system where everything feels too slow. Would it help to scale the whole world smaller so that lower speeds seemed faster, or would a smaller object just suffer the problem more easily?

When corrections are high, if the phsyics entity penetrates even a small bit it seems to be pushed away at a very high rate. This seems to happen when passing over an edge like at the bottom of a ramp, or if you run into a vertex.